Union Budget 2026: Focus on future employability

Lohit Bhatia

The Union Budget 2026 reads very different when seen from the vantage point of the employment economy. From where businesses that operate at scale sit, this is not a Budget about dramatic shifts, but about emphasising a direction that has been taking shape over the last few years. The macro environment has given policymakers room to think beyond immediate FY26 or FY27, and this Budget uses that window to focus on employability, workforce preparedness and execution for Viksit Bharat 2047.

The way employment is being approached sends a clear message. The emphasis is not on headline job creation, but on whether people are equipped for work that is sustainable and formal. The move to institutionalise an Education-to-Employment Standing Committee for the services sector reflects a growing recognition that India’s labour market outcomes will depend on alignment rather than access alone. Services continue to absorb the bulk of the workforce, but the mismatch between education, skills and industry demand has been a persistent constraint, limiting productivity and wage growth. Closing that gap is essential if economic expansion is to translate into meaningful employment.

This line of thinking carries through the skilling interventions outlined across healthcare, allied health, geriatric and wellness services, and emerging digital roles. These sectors are expanding because of long-term population and consumption trends, which makes hiring more stable rather than cyclical. Skills that align with global standards further widen job opportunities, allowing Indian professionals to access overseas work, raise incomes and contribute back to the economy at home. Infrastructure investment continues to play a foundational role in this transition. The increase in public capital expenditure to Rs 12.2 lakh crore extends a sustained investment cycle that has already begun to influence employment and productivity across sectors. From an operating perspective, consistency in infrastructure spending matters. It improves logistics, reduces friction and creates conditions in which private investment is more likely to follow.

The continued focus on biopharma manufacturing, semiconductors, electronics components and critical materials points to an effort to build depth in industrial capability rather than rely on fragmented capacity.
Fiscal choices shape how these priorities play out. The Budget 2026-27 targets a fiscal deficit of 4.3% of GDP, helping anchor confidence in the policy framework. For businesses making long-term decisions, predictability often matters as much as incentives. Stable inflation expectations and more predictable interest rate conditions allow capital allocation to be planned with greater certainty.

The Budget also addresses issues that tend to be felt more than discussed. Clarifying tax deduction norms for manpower services, reducing pre-deposit requirements in disputes, and allowing greater flexibility in return revisions ease operational friction. These measures improve cash-flow efficiency and reduce avoidable uncertainty, particularly for enterprises operating across sectors and geographies.

In totality, this year’s Union Budget improves the conditions in which employment can grow steadily over time. It reflects a shift from managing short-term pressures to focusing on fundamentals that support skills, productivity and formalisation. From an employment perspective, that continuity is not incremental; it is necessary.

(The writer is CEO of Quess Corp)